To The Moon

Oil prices experienced their largest decline in over three months as supply concerns regarding the Middle East and the Black Sea region eased. Copper prices advanced, with the de-escalation of tensions between the US and Iran alleviating worries about further disruptions to the global economy. Gold prices moved higher, as a pause in hostilities between the US and Iran reduced concerns about oil supply disruptions and rising inflation, while also lowering expectations for further monetary policy tightening.

Crude Oil: Prices Dip as Supply Threats in Middle East and Black Sea Ease

Crude oil posted its steepest drop in more than three months. The US paused its daily airstrikes against Iran, and oil tankers resumed loading at a major Kazakh crude export terminal that had recently been disrupted. This eased the supply tightness that had been driven by multiple factors. Brent crude fell 8.7% to settle around $88 per barrel, marking its largest single-day decline since April 17. WTI and European natural gas prices also saw significant drops. The US appears to have halted new strikes on Iran since late Friday, while Iran signaled a temporary pause on retaliation and held talks with Oman regarding the Strait of Hormuz. However, Saudi Arabia later reported intercepting a drone targeting its oil facilities, which was launched from Iraq. In an interview with Axios, US President Donald Trump stated that he decided to pause strikes on Iran to give negotiations another chance. Trump later told reporters that talks with Iran have a "very good chance" of making some progress and that there is "plenty of time." Meanwhile, the Caspian Pipeline Consortium terminal on Russia's Black Sea coast resumed crude oil loading operations. This terminal is a key port for Kazakhstan's crude exports. Data from the US Commodity Futures Trading Commission released on Friday showed that last week's surge in oil prices attracted bearish investors, who increased their bets on a price decline. September-delivery WTI fell 7.5% to settle at $82.61 per barrel, while September-delivery Brent dropped 8.7% to settle at $88.36 per barrel.

Base Metals: Copper Rises Amidst Eased Global Economic Concerns

Copper prices extended their gains from July, as the temporary de-escalation of the conflict between the US and Iran reduced fears of further disruptions to the global economy. The US appears to have paused airstrikes on Iran, and Tehran signaled it would not retaliate immediately, fostering cautious hope for a resumption of ceasefire talks. Copper inventories on the Shanghai Futures Exchange fell to their lowest level since February 2024. Jinrui Futures noted in a report, "Although the pace of destocking has slowed, the continued decline in domestic inventory still supports copper prices remaining at high levels." At the close of trading, LME copper rose 0.6% to $13,732.5 per metric ton; LME aluminum increased 0.3% to $3,167.5 per metric ton; LME nickel fell 1% to $17,213 per metric ton; LME zinc gained 0.5% to $3,611.5 per metric ton; LME tin rose 1% to $54,341 per metric ton; and LME lead added 0.2% to $1,891 per metric ton.

Precious Metals: Gold Advances as Inflation and Policy Tensions Subside

Gold prices rose as the pause in hostilities between the US and Iran alleviated market concerns about oil supply disruptions and rising inflation, while also reducing expectations for further monetary policy tightening. The price of gold climbed as much as 1.6%, breaking above $4,100 per ounce, before paring some gains in the US morning session. Justin Lin, an analyst at Global X ETFs, commented that the halt in fighting is positive for gold, but the market needs to see "substantial progress between the US and Iran for gold to break out of the $4,000 to $4,200 range." As of 5:00 p.m. Eastern time, spot gold rose 0.6% to $4,076.26 per ounce, while spot silver added 0.3% to $58.365 per ounce.